FP Legal Post League Tables for 2011: Volatility is the New Norm

FP Legal Post League Tables for 2011: Volatility is the New Norm

Canadian law firms represented issuers on 684 equity and debt deals valued at $90.56-billion during the course of 2011. That represents a significant drop in activity from last year, when Canadian lawyers worked on 728 deals valued at a combined $102.08-billion. The dollar value of deals dipped by 11% year over year, while deal flow declined 6%.

McCarthy Tétrault LLP is no stranger to the top of Legal Post’s legal tables, and 2011 was no exception. The firm was the top performer across six out of the 12 different ways we rank our data. Among those rankings, the firm sits atop our marquee table for 2011, Canadian Legal Advisor to the Issuer for Combined Debt and Equity as ranked by value, having worked on 42 deals valued at $16.11-billion.

“It’s always great to see that,” says Jonathan Grant, a partner in the business law group in the Toronto office of McCarthy’s, “The way we measure success is how [clients] reward us with their work.”

Stikeman captured what is arguably a more important ranking in our marquee table. Its 45 deals lifts the firm to first place in terms of deal flow. League Tables emerge from the investment banking world, where deal values are important because banks earn commission on financing deals. Law is a different business. Time is the law firm’s commodity, so deal flow arguably tells you more about a firm’s earning capacity.

“Our deal flow certainly exceeded our expectations for the year, although, to be fair, we didn’t have the highest expectations for the year going into 2011,” says Jeffrey Singer, a partner and a member of the management committee in the Toronto office of Stikeman Elliott. He says 2011 was a “somewhat choppy” year, and expects much the same for 2012. “Market windows seem to open and close as fast as the general economic indicators go up and down.”

David Toswell, a partner with Blake, Cassels & Graydon LLP, echoes those sentiments. Market uncertainty slowed activity in the second half of the year. That continues into the first quarter of 2012, he says:

While we’ve never combined our tallys for legal advisor for both issuers and underwriters, it is interesting to note what would happen if we did. McCarthy’s would still be tops in terms of deal value, but Blake’s would emerge as the busiest firm on the street, having worked on a combined 115 deals.

A glance at our other tables (they’re all hyperlinked to this story) reveals some niche expertise on the part of smaller firms. Calgary-based Burnet, Duckworth & Palmer LLP is a single-office firm of only 140 lawyers, but when it comes to churning out equity deals it easily competes with national firms that have hundreds more lawyers working at offices across Canada. McCarthy’s captured the top spot when ranked by deal value in our table for Canadian Legal Counsel to Equity Issuers, with 24 deals worth $3.55-billion. But Burnet was the busiest firm in terms of advising issuers on equity deals, working on 37 deals valued at a total $3.02-billion.

“We are fortunate to be where we are in these tables because of the lottery of birth, and our being in Calgary, Alberta,” says Gary Bugeaud, managing partner of Burnet. “The oil and gas industry, including the oil sands, is a huge user of capital and therefore there is a much higher than typical capital raising concentration out of Alberta.”

Then there’s Miller Thomson LLP. It’s a national firm, but it has a lot of offices in smaller centres that tend to be overlooked by the big national names. McCarthy’s captured the top spot when ranked by deal value in our table for Canadian Legal Counsel to Equity Underwriters, having worked on 39 deals worth $5.82-billion. But then look at Miller Thomson. In terms of deal value, it’s down the list, working on $181.87-million worth of deals for underwriters. But in terms of deal flow, it smokes even the big national firms, having worked on an impressive 70 deals.

“What we’ve been doing more broadly over the last few years is growing and strengthening our national capital markets and M&A practice through lateral hires. And we’ve been doing that while maintaining a pretty sharp focus on the middle market,” says Jay Hoffman, co-chairman of the business law group at Miller Thomson.

And in our table for Canadian Legal Counsel to Debt Underwriters, Osler’s was tops when ranked by deal value, with 15 deals worth $6.87-billion. Blake’s was tops when ranked by deal flow, with 16 deals worth $5.43-billion.

“We’ve had the benefit for a number of years of having strong underwriter relations, and that always leads to a number of retainers,” says Michael Innes, a partner with Osler’s.

In coming days, we’ll publish data for the fourth quarter alone. That should tell quite a story, since activity on Bay Street took quite a drop after the summer.